Open Innovation Practices in the Development of Wind Energy Supply Chain: an Exploratory Analysis of the Literature

http://dx.doi.org/10.4322/pmd.2013.004 Open innovation practices in the development of wind energy supply chain: an exploratory analysis of the literature Mario Orestes Aguirre González, Marcela Squires Galvão, Samira Yusef Araújo de Falani, Joeberson dos Santos Gonçalves, Lorena Tâmara Sena da Silva Federal University of Rio Grande do Norte e-mails: [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Abstract: The open innovation approach and its practice in technological innovation projects have been revealed in the literature and observed in practice companies as an old phenomenon. What differentiates its current use is that today its practice occurs in a systematic and formalized form in companies. This paper carried out a bibliographic‑exploratory research about the wind power supply chain and it analyzes how technological innovations made their development possible. The study focuses specifically on exploring within the technological innovations occurred in the chain wind power, as the innovative approach followed by developers organizations. Results indicate that open innovation practices were essential for the success of economic and technological feasibility for the development of such chain, primarily by what happened partnership between the manufacturers of major components (aero generators, towers, blades) wind energy, research institutes, laboratories, universities and federal governments through incentive policies. Keywords: technological development, wind energy supply chain, open innovation. 1. Introduction The current economic environment requires a market the search for new renewable energy sources, among them response in less time and with greater product innovation. wind and solar energy (DUTRA, 2001). In organizations, the Research and Development department Wind energy presents itself as an excellent alternative has the responsibility for carrying out the research on in generating clean energy. In Brazil, the increase in the new production alternatives of products and services generation of wind energy increased from 145 MW in 2007 at affordable costs, providing competitive advantage to to 2.3 GW in 2012 (AGÊNCIA..., 2012). The Northeast companies. The generation of residues and the emission region in Brazil stands out as a potential region of climate of pollutants that damage the environment grow in direct and weather conditions with winds of high quality, measured proportion to consumption. Thus, the search for sustainable by indicators speed and continuity. However, the expansion and ecologically correct products is generating new of wind energy too occurred due to the economic and market opportunities, since environmental issues present technological feasibility of the main components of a wind themselves as strategic targets in the corporate environment. farm as a result of the development of more efficient and The partnership among an organization and other economical technologies. According to data of the Agência companies or research institutes seeking to exchange market Nacional de Energia Elétrica – ANEEL (AGÊNCIA..., information and technology to innovative ideas that arise 2012), the price of electricity sold, from wind farms, fell or solutions to existing ideas, characterize the practice of from R$ 305/MWh in 2005 to R$ 100.9/MWh in 2011. open innovation. According to Chesbrough (2003, 2011), This paper aims to analyze the application of open the open innovation occurs when the company adds external innovation approach in technological innovation projects of knowledge and, along with internal knowledge, it generates equipment and components supply chain of wind energy. value for the organization. That is, the boundary between For this, was conducted a bibliographic‑exploratory study the firm and its environment is porous assuming exchange on the topics: open innovation, technological innovation and of expertise. chain of wind energy. Further, the study was complemented One of the sectors that have shown a significant amount with technical reports and research on the development of of research in the area of sustainability is the energy sector, technologies of wind energy supply chain. whose consumption increases, progressively, both in The paper is organized into five topics. The first one industry and commerce, and also in residences. This concern describes the introduction and the purpose of the research. consumption along with sustainable development justifies Topics 2, 3 and 4 present a brief bibliographic review on 104 Open innovation practices in the development of wind energy supply chain: an exploratory analysis of the literature González et al. the basis of the topic under study: open innovation, wind The difference between these two approaches is in energy and technological innovation in the of wind energy the way enterprises organize their innovation processes. chain, respectively. Finally, the fifth section deals the final According to Chesbrough (2003), the process of research considerations of the study. and development, which is exclusively internal of companies, discriminates the good ideas, which are not 2. Open innovation presented as good, so that only the best are sold. Though, the The traditional model of innovation – closed innovation open innovation still has the ability to retrieve projects that (see Figure 1) – requires control in innovations, in other seem poor, but may become useful during its development. words, companies must generate their own ideas without Organizational leaders must understand the practice of sharing their clients and partners with the external this approach in order to be adopted in accordance with environment. The benefits and profits from innovation the company’s business model, because every change has are reinvested in the company to new research. However, an impact on the organization, as sharing common vision the mentality has changed and businesses were opening and mission with partners; changing systems, processes, their research to other companies, organizations and their values, culture of the company as an entire; emergence of customers. Therefore, when adding external knowledge with opportunities and threats. Leaders need to provide even more internal knowledge, it increases the value of the organization, motivation, confidence to performance in the team so that so they started to practice the new innovation model – open everyone is looking for the same common aim. innovation (see Figure 2) (CHESBROUGH, 2003). The open innovation approach shows up differently for small and large businesses. According to Lindegaard (2011a) the main features that link these differences are: • Speed in decision‑making – in small businesses, due to lack of bureaucracy, decisions are made more quickly. Though, the practice of open innovation in small businesses progresses more slowly than in large firms. The latter suffer pressure from the first ome in order to act faster than they are; • Attitude to risk – when a small business is still starting on the market, the whole business is a risk. But, just as in speed, when talking about open innovation, both types of company may, due to their differences, do not relate well; and • Resource Allocation – in small businesses, every feature is relevant to the company, while in large organizations, this narrow view of importance of Figure 1. Model of closed innovation. Source: Chesbrough resources is more malleable. (2003). These differences must be understood by both parties of the the partnership formed for the open innovation practice to be satisfactory. Lindegaard (2011b) presents a research by the Danish Chamber of Commerce which shows that between the years 2007‑2010 only 44% of Danish companies had conducted some innovation activity in their product, service or process. The research also reports the fact that large companies launch new products more often than small firms. For the success of chain of any organization, it becomes necessary to seek information from two types (PILLER; IHL, 2009): detailed and accurate knowledge about the needs related to the product – client domain – and the techniques of how to solve these needs – the company domain. Additionally, businesses can contribute to skills, both their employees as their customers, to identify and Figure 2. Model of open innovation. Source: Chesbrough educate its consumers – a view from the outside – and (2003). organize themselves internally ‑ view from the inside. Vol. 10 nº 2 December 2012 Product: Management & Development 105 According to Huizingh (2011), the concept of open demand and political priority for renewable energy has innovation can be understood through the distinction among transformed India into one of the most dynamic markets the terms content, context and process. The content covers in the world. At the same time, the introduction of a new the different types of openness of the organization, the tax code and uncertainty about the future tax benefits that main activities of inbound and outbound for innovation have driven much of the growth in India to date are of and the factors of its effectiveness. The context involves concern to investors (GLOBAL..., 2011). Still, the country characteristics of the internal and external environment of has the company Suzlon, considered as one of the leading the company. Finally, the process involves the transition manufacturers of wind turbines in the world. to open innovation (before it was a closed innovation, that is,

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